Stock Take Discrepancies Between a Count Sheet and Recorded Quantities

question 23

Multiple Choice

Stock take discrepancies between a count sheet and recorded quantities in the ledger may arise due to:
I Theft of stock during the year
II Stock purchased under FOB destination terms being in transit at period end
III A consignee including consignment stock in their physical count
IV Sales returns not being processed into the ledger

• A) I, II and III;
• B) II, III and IV;
• C) I, III and IV;
• D) I, II and IV.

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Definitions:

Prudent Investor Rule

An investment manager must act in accord with the actions of a hypothetical prudent investor.

Professional Investors

Individuals or entities that earn a living by managing and investing in various securities and asset classes on behalf of themselves or others.

Institutional Investors

Entities such as pension funds, insurance companies, and mutual funds that invest large sums of money on behalf of individuals.